Audits: Prison vendor charged for unserved meals

COLUMBUS, Ohio (AP) -- A private vendor in line to begin feeding roughly 100,000 prison inmates in Ohio and Michigan has a track record of billing for food it doesn't serve, using substandard ingredients and riling prisoners with its meal offerings, past audits in several states show.

But some states say Philadelphia-based Aramark Correctional Services has performed well.

The audits in Ohio, Florida and Kentucky found Aramark charged states for meals not served, changed recipes to substitute cheaper ingredients and sometimes skimped on portions.

A 2001 audit by then-Ohio Auditor Jim Petro found a verbal amendment to Aramark's two-year contract led the state prisons department to pay Aramark for serving almost 4.5 million meals rather than the 2.8 million meals it actually served. That added $2.1 million to the contract cost.

An internal audit by Florida's prisons department in 2007 concluded Aramark's practice of charging the state per inmate rather than per meal created "a windfall for the vendor" after a large number of inmates stopped showing up for meals, reducing company costs by $4.9 million a year. The review found the company was paid for some 6,000 meals a day that it didn't serve. Aramark stopped serving Florida's prison meals in 2009.

Kentucky's state auditor launched a review of Aramark in response to the 2009 prison riot at Northpoint Training Center sparked over food issues. Auditor Crit Luallen's 2010 report found Aramark overbilled the state by as much as $130,000 a year, charging for the meals of as many as 3,300 inmates that were shown through head counts not to be incarcerated.

Besides payments for unserved meals, the audits found Aramark sometimes substituted cheaper ingredients — receiving inmate-grown food against contract terms or substituting less expensive meat products, for example — without passing savings on to taxpayers. During an Ohio site visit, inspectors reported witnessing a "near riot" at breakfast when Aramark adhered strictly to its contractual portion sizes.

In general, states still saved money overall — the primary enticement behind the latest privatization efforts in Ohio and Michigan.

Michigan Gov. Rick Snyder's administration initially decided not to privatize certain prison services after determining three contracts out for bid didn't achieve the savings state law required.

Fellow Republicans in the Legislature balked and officials re-evaluated the cost estimates, ultimately awarding the contract to Aramark on grounds the company's proposal would cut about $16 million from the state's current $73 million food service budget. Democrats said the state had "magically reworked the money."

The Ohio Civil Service Employees Association questions whether Aramark can deliver the $14 million in annual savings it has promised the administration of Republican Ohio Gov. John Kasich without cutting corners.

The union, which represents roughly 8,600 state workers in Ohio's adult and youth prisons, had made its own higher bid aimed at keeping prison food service in-house.

"As much as the state says they want to give them another shot, all you've got to do is look at their recent history in Kentucky and Florida and you'll see they haven't changed from when Jim Petro did his investigation years ago," said Tim Shafer, the union's operations director. "That's how they make money."

The $110 million Ohio deal to feed some 50,000 inmates starts Sept. 8 and runs through June 30, 2015, with two opportunities to extend. More than 230 of the Ohio Department of Rehabilitation and Correction's 433 food service workers have been moved to other positions, and additional relocations are being attempted.

The deal calls for the state to pay Aramark for serving three meals a day to the number of inmates at the previous day's midnight census count — a per-inmate arrangement rather than per meal like those criticized by auditors in the past.

Michigan's change of heart on cost savings also hinged on agreeing to Aramark's assumption that all 44,000 state inmates would eat three meals a day, a state bulletin on the matter indicated.

Shafer said the contracts are a recipe for overbilling.

"Not every inmate eats. Not every inmate eats every day. Not every inmate eats every meal," he said.

JoEllen Smith, a spokeswoman for Ohio's corrections department, said the state requested "multiple pricing methodologies" from prospective vendors and determined that basing the contract on midnight census counts was the most cost-effective. She said this contract won't allow for verbal changes.

Kansas Department of Corrections spokesman Jeremy Barclay said Kansas pays Aramark on "a kind of sliding scale" based on the average population per facility the previous month. He said the state has had a generally positive experience.

"We've been using them for at least a decade and overall the track record's been very good," said Barclay. "Keep in mind, we also have internal procedures to make sure that's going well. We don't just sign a contract and say, 'Everything will be well.' We monitor that carefully."

Kentucky has also chosen to put safeguards in place as a result of the 2010 audit findings, said Department of Corrections spokeswoman Lisa Lamb.

Among other things, the department established a new position devoted to helping monitor the contract, she said.